In general, a change of legal status or ownership type is due to either:

• a change in the number of owners of the business
• a change in the incorporation status

In most cases, you have to close your existing business number (BN) and Canada Revenue Agency (CRA) accounts and register for new ones.

Changing the number of owners of the business

In a partnership

Your legal status does not change if all of the following are true:

• your business is a partnership
• there is a change in the number of partners (but not less than two)

In a sole proprietorship

Your legal status must change if all of the following are true:

• your business is not incorporated
• the number of owners of your business changes. For example, from one owner to multiple owners or from multiple owners to one owner.

When the number of owners in a sole proprietorship changes, your business legal status changes in one of the following ways:

• from sole proprietorship to partnership
• from partnership to sole proprietorship

For these legal status changes, you have to call the CRA at 1-800-959-5525.

Changing whether the business is incorporated or not

When your business becomes incorporated

Your legal status can change in one of the following ways:

• from sole proprietorship to corporation
• from partnership to corporation

When you change your legal status to incorporate an existing business, you need to do the following:

Step 1

You must contact the appropriate incorporating authority and register a new corporation, even though you already have an existing BN.

If you are incorporating with Innovation, Science and Economic Development Canada or one of the provincial incorporating authorities listed on Canada Revenue Agency registration and other provincial or federal programs, the following will apply:

• a new BN will automatically be registered with the CRA for your new corporation
• a new Corporate Income Tax (RC) program account will automatically be associated to the new BN
• skip step 2 and go to step 3

Step 2

Once your incorporating authority has provided you with your new incorporation information contact the CRA at 1-800-959-5525 to register a new BN. A new RC program account will automatically be associated to the new BN. During the same phone call, follow step 3.

Step 3

Once the new BN has been registered with the CRA, any program accounts that are associated to your old BN, such as GST/HST (RT) program account or payroll (RP) program account will not be automatically associated to the new BN.

• If you need RT or RP program accounts for the new BN, you will need to contact the CRA at 1-800-959-5525 to register them on the new BN.
• Finally, close your old BN and all the CRA program account associated to it.

When your business is no longer incorporated

Your legal status can change in one of the following ways:

• partnership to limited partnership
• corporation to sole proprietorship
• corporation to partnership

For these legal status changes, you have to call the CRA at 1-800-959-5525.

Amalgamation

When two or more corporations amalgamate, you must call the appropriate incorporating authority. For more information, go to Corporation income tax program account.

Related links

• Business and industry
• Innovation, Science and Economic Development Canada
• Related provincial and territorial government sites
• Setting up your business